Hollywood Plays Guessing Game With 2014 Releases in China

Studios have high hopes for juicier 2014 on the Mainland

HONG KONG — Which Hollywood films will get into China through the import quota system is a guessing game that was in full swing last week at CineAsia, the last significant Asian film trade convention of the year.

The convention and trade show, held in Hong Kong for the past five years, is the platform for the six major studios to publicly play their show-reels, clips and trailers to the region’s exhibitors – and behind the scenes to jockey for position.

Giving some indication of the Asia region’s continuing expansion, the trade show was the biggest in CineAsia’s history. And giving some idea of the pace of technological change, the mainland Chinese manufacturers of conventional 35mm projectors, which were still a feature of the market as recently as three years back, have now been replaced by Chinese digital and 3D systems players such as Shenzhen LeVision Technology and Leonis Cinema. They were confidently pitching against the familiar market leaders including Christie, Barco, Doremi, Sony and GDC.

Each Hollywood studio expects to get four to six studio films each per year in to China through the revenue-sharing quota system that expanded from 20 per year in 2011 to 34 per year following a deal struck in early 2012. The expanded total includes an additional 14 Imax and special category movies.

The enlarged import total did not do Hollywood too much good this year. The gross market share for Hollywood slipped to some 45%, according to latest figures from researcher EntGroup.

The good news for the Hollywood distributors at CineAsia was that many reported 2013 remittances from earnings — worth 25% of gross revenues since the 2012 agreement — are now flowing. Earlier this year there was a major hiatus as China Film Group sought to pass on a luxury tax to studios and withheld Hollywood’s rentals for several months.

Off the record, the studios’ old hands would quietly say that the expanded quota did not change as much as the headlines might suggest. “Perhaps it went from 25 films really, to 34, but we all know that it could be more, and it could be less,” said one veteran.

But the variables are more complicated than just the number of films to get a license, and the CineAsia guessing game was really a case of second guessing.

Top of the agenda is trying to second-guess what China’s Film Bureau will find acceptable and what China Film Group (the only licensed importer) think is right for the market — and for its own bottom line.

Other unknowns include:

Whether CFG will dispense its favors even-handedly among the studios;

whether CFG and the Bureau will deliberately pick weaker Hollywood titles in order to massage market share in favor of Chinese films;

what the “blackout periods” — when screens are reserved for new Chinese releases and continuing runs of Hollywood titles — of 2014 will be;

whether CFG’s anticipated IPO will change its distribution practices;

whether another distributor will get a license in 2014;

what are the Hollywood titles that might be seen from the Chinese regulator’s point of view as bordering on sensitive or political areas (anti-government sentiment, revolution, espionage, bureaucratic corruption, as well as the obvious no-go areas such as anti-China content or Tibet)?

Corridor gossip at CineAsia pointed to Paramount as being on course to get five pictures in next year, including “Jack Ryan: Shadow Recruit” (Chris Pine, espionage theme; pictured above); “Ninja Turtles” (Megan Fox); “Transformers: Age of Extinction” (robot-monsters, shot in Hong Kong and China); and “Hercules” (action-adventure, Dwayne Johnson).

Universal will kick of its 2014 campaign in China with the delayed release of “Despicable Me 2.” But its untitled Michael Mann computer espionage film in which Chinese and U.S. forces work together is officially set for a January 2015 global outing and no China release date is known.

Disney, which has 20 movies to release in Asia over the next 18 months from its five labels, seems likely to find a berth for several, with Marvel’s “Captain America: The Winter Soldier” (sci-fi, Scarlett Johansen, Chris Evans) one of the front-runners. “Need for Speed” (game adaptation, 3D and Imax) looks able to bet on a China release too.

Sony Pictures’ “Robocop” reboot looks tailor-made for Chinese audiences, and it would be equally surprising if “The Amazing Spider-Man 2” did not find its way on to Chinese screens given the successful B.O. outing for the previous installment in 2012.

Fox has plenty to pitch to the Chinese gatekeepers, with two of its likeliest the franchise movies “Rio 2” and “X-Men: Days of Future Past.”

But, as all the China-facing executives like to remind anyone who cares to listen, nothing is certain until it happens.